Employer compensation

[meanmiJ01]

I know there is a job type thread about every month, but there always seems like good advice. I have an offer and the employer is including fica as part of my compensation.
Has anyone come across this before? If so what is a good rebuttal to that? It isn’t like it is an optional line item or something either of us can opt out of.

Any and all thoughts greatly appreciated.

 

[diontechristmas]

It is what it is..... and everyone involved knows that.
So they list it as a “line item”.... along with every other expense they incur to hire you. So what?

What is there to “rebut”?

Done.





But, hold on, Ranger Dan probably has some good advice

I know there is a job type thread about every month, but there always seems like good advice. I have an offer and the employer is including fico as part of my compensation.
Has anyone come across this before? If so what is a good rebuttal to that? It isn’t like it is an optional line item or something either of us can opt out of.

Any and all thoughts greatly appreciated.

I don’t understand. Fico meaning your credit score?

 

[Erial_Lion]

I don’t understand. Fico meaning your credit score?

FICA...ie their part of your Social Security tax

 

[Art]

I know there is a job type thread about every month, but there always seems like good advice. I have an offer and the employer is including fica as part of my compensation.
Has anyone come across this before? If so what is a good rebuttal to that? It isn’t like it is an optional line item or something either of us can opt out of.

Any and all thoughts greatly appreciated.

Nothing to rebut. You can't negotiate FICO. Ignore it. Focus on base, bonus, and any other perks that accrue. If the company is using the inclusion of FICO to reduce your comp below your requirements and they won't budge, then your next step is pretty obvious.

 

[SheldonJoe2215]

in my experience, there are very, very few companies that are going to include FICA as what they are selling as their total compensation. This raises a red flag for me about the company. I think you might want to call shenanigans on this crew and look elsewhere.

 

[ForesterGump]

If I understand the proposition, they will reimburse your FICA payments. From your standpoint, you receive more money in your paycheck. From their standpoint, they can offer you a 7.65% increase in take home pay, but not have to pay their share of the FICA tax on that increase in pay. You'll still be responsible for the taxes on the extra.

 

[psuro]

Look elsewhere.

 

[Nittany Ziggy]

Look elsewhere.

Yes! If the cheap coc#suckers are acting like this in the “romance period”, just wait until they have you under their oppressive thumbs.

 

[JoeLion]

It appears they are communicating total comp. All employers pay fica. Do they include medicare and a 401k match?
There is a reason for this. Check the medical premiums you will be paying and the benefits in general, especially time off. They may be trying to make up for a deficiency some where else.

 

[psuro]

I know there is a job type thread about every month, but there always seems like good advice. I have an offer and the employer is including fica as part of my compensation.
Has anyone come across this before? If so what is a good rebuttal to that? It isn’t like it is an optional line item or something either of us can opt out of.

Any and all thoughts greatly appreciated.

Are they hiring you under a contract position, or as a full time employee?

 

[NatLion]

Ignore it. Do they include heat, electricity, rent, wall art and plants for the office you will work in? If so, ignore that too. Compare the variables in your calculus -- salary, retirement contributions, stock, and benefits (incl co-payment, deductibles, annual maximums, etc.)

And it is not all that unusual -- a lot of companies will hand you a packet each year showing just how much the all-in cost of employment really is on their end including all their contributions for benefits which in some cases can be as much as salary. Ignore that too.

 

[Zenophile]

I know there is a job type thread about every month, but there always seems like good advice. I have an offer and the employer is including fica as part of my compensation.
Has anyone come across this before? If so what is a good rebuttal to that? It isn’t like it is an optional line item or something either of us can opt out of.

Any and all thoughts greatly appreciated.

Offer aside, how was your experience with this group?

 

[heckmans]

I know there is a job type thread about every month, but there always seems like good advice. I have an offer and the employer is including fica as part of my compensation.
Has anyone come across this before? If so what is a good rebuttal to that? It isn’t like it is an optional line item or something either of us can opt out of.

Any and all thoughts greatly appreciated.

WOW...lot of people who think they are really smart that don't know much of anything. It's easy for them to say "move on" when it's not their financial future at stake.

While I've never come across this as part of a job offer, many companies now make employees aware of the total costs of employing them. I get a statement generally around the time of benefits open enrollment. It shows every dollar the company shells out for the privilege of having me as an employee. In addition to monetary salary, it shows the cost of all fringe benefits as well as the taxes on my compensation(ie FICA) that the govt hides from me by requiring the company to pay it directly to them and not show it on my paystub, as if the company doesn't consider it a cost of employing me.

While it's fair for the company to show you the true costs of hiring you, it's not really part of your "compensation" as you would typically evaluate an offer. Simply do the math and decide whether the offer if acceptable. Proceed accordingly.

 

[razpsu]

Interesting. I’m an employer and the amount of taxes and fees you pay as an employer is crazy. I wonder what the government does with all of the money they receive. Waste it is probably number 1 on the list.

 

[Zenophile]

And it is not all that unusual -- a lot of companies will hand you a packet each year showing just how much the all-in cost of employment really is on their end including all their contributions for benefits which in some cases can be as much as salary. Ignore that too.

On the contrary, pay very close attention to that -- especially if you're in the market for a new gig.

 

[NatLion]

On the contrary, pay very close attention to that -- especially if you're in the market for a new gig.

I was not suggesting to ignore benefits -- only the employer cost of such. i.e if they are telling you that it cost them $x dollars to give you y weeks of vacation ignore the x and focus on the y. The $x is just a shiny distraction...

 

[Erial_Lion]

If I understand the proposition, they will reimburse your FICA payments. From your standpoint, you receive more money in your paycheck. From their standpoint, they can offer you a 7.65% increase in take home pay, but not have to pay their share of the FICA tax on that increase in pay. You'll still be responsible for the taxes on the extra.

I’m sure they’re showing THEIR part of the FICA tax, not a reimbursement of his part.

 

[ForesterGump]

When the employer sends in their quarterly taxes to the government, they include both halves of the FICA. When you get your W-2, they'll show the amount that you paid in. For this scheme, the employer will have paid both sides. But, you'll have to pay tax on the amount the employer paid in for your half of the FICA, and you will have to pay an additional tax on the money they paid you for the reimbursement, since that is additional income. Depending on the income level, it isn't much of a benefit, since the government gets a good bit of it.

 

[psualt]

When the employer sends in their quarterly taxes to the government, they include both halves of the FICA. When you get your W-2, they'll show the amount that you paid in. For this scheme, the employer will have paid both sides. But, you'll have to pay tax on the amount the employer paid in for your half of the FICA, and you will have to pay an additional tax on the money they paid you for the reimbursement, since that is additional income. Depending on the income level, it isn't much of a benefit, since the government gets a good bit of it.

No one is reimbursing anything. It appears they are showing him a total compensation figure or what in total is paid on his behalf. The employer isn't paying his part of the FICA.

 

[Lionguy32]

The rebuttal is that you would rather have those FICA payments as additional gross wages so you can build up your social security base.

 

[Lionguy32]

That’s not the way it works.

Which part?

 

[Lionguy32]

Is that a serious question?

If so, I’ll answer it for you:

An employer - or an employee, for that matter - can’t elect to “treat FICA tax payments as gross wages”
The US Treasury/IRS is funny that way
Most of their regulations are not “optional”

(Not to mention, if one could, it would only serve as a detriment to the employee)

Yeah, they are funny that way. You can pay someone's FICA taxes and that becomes taxable income to them. That income just isn't subject to FICA taxes again.

 

[Dr. Evel]

WOW...lot of people who think they are really smart that don't know much of anything. It's easy for them to say "move on" when it's not their financial future at stake.

While I've never come across this as part of a job offer, many companies now make employees aware of the total costs of employing them. I get a statement generally around the time of benefits open enrollment. It shows every dollar the company shells out for the privilege of having me as an employee. In addition to monetary salary, it shows the cost of all fringe benefits as well as the taxes on my compensation(ie FICA) that the govt hides from me by requiring the company to pay it directly to them and not show it on my paystub, as if the company doesn't consider it a cost of employing me.

While it's fair for the company to show you the true costs of hiring you, it's not really part of your "compensation" as you would typically evaluate an offer. Simply do the math and decide whether the offer if acceptable. Proceed accordingly.

This post nails it.

I agree that having it as a part of a job offer is unusual. Including it in the annual recap, however, makes a lot of sense. We do that at our company. I think it is important for employees to have a sense of the total cost of employment to the employer. Our salaries are competitive, but nothing crazy. Our benefit package is well above the market. We want the employees to be aware of that rather than focus solely on salary and bonus. While we are of course required to pay FICA by statute, there is no harm in including it in the total cost of employment. Heck, it is a part of the cost of employment. Why not show that?

If they are showing their FICA piece in the job offer and treating it as Comp, that is silly. Everyone else would have to pay that if they hired you, too. Perhaps they are showing it differently in the offer letter and I'm not understanding the OP, but this is how I took it.

 

[psualt]

Yeah, they are funny that way. You can pay someone's FICA taxes and that becomes taxable income to them. That income just isn't subject to FICA taxes again.

Let’s assume there is $765 in taxes that is the employee’s share. If your employer somehow wants to show that they are paying this for you and thus pays you $765 more in gross wages. Are you saying that this $765 additional wages is not subject to withholding?

 

[fkkkjm]

Is that a serious question?

If so, I’ll answer it for you:

An employer - or an employee, for that matter - can’t elect to “treat FICA tax payments as gross wages”
The US Treasury/IRS is funny that way
Most of their regulations are not “optional”

(Not to mention, if one could, it would only serve as a detriment to the employee)

My concern would be that the company is being very transparent that you are an expense and not talent. Any company that presents this type of shit when you are still haggling over the offer details is a red flag in my opinion. Corporate equity is through the roof right now, so in general, the war chests aren’t empty for most major companies. Again, general statement, but people are still bullish. I’d run like hell from an offer positioned in such a way, especially in today’s job market.

 

[tboyer]

Assuming it's just informational I wouldn't overreact to it. The company pays you a salary and they also pay benefits which include their side of FICA. When they include that and health insurance and disability and maybe a 401k match, it allows them to give you a bigger "total compensation" number to sound impressive. Maybe they think that gives them an edge dealing with people they're trying to hire.

However if they're saying your salary is, say, $80,000 a year including their part of the FICA, to me that wouldn't really be kosher because their half of the FICA tax isn't paid out of your salary, only your half is.I doubt they're doing that because it would be misleading.

Just remember that in general, workers have more leverage right now in this job market than perhaps we have ever had in our lifetimes. In general people can hold out for a very nice raise if someone wants to hire them for another job. I assume the offer represents a nice raise or you wouldn't even be having the discussion here.

 

[Art]

My concern would be that the company is being very transparent that you are an expense and not talent. Any company that presents this type of shit when you are still haggling over the offer details is a red flag in my opinion. Corporate equity is through the roof right now, so in genMail 2 eral, the war chests aren’t empty for most major companies. Again, general statement, but people are still bullish. I’d run like hell from an offer positioned in such a way, especially in today’s job market.

Agree. Further, see no value in itemizing the total cost of employment to people already on the payroll. For budget purposes, we calculate benefits as a percentage of base. Everyone in the firm knows what that is, No reason to slug the staff over the head with it as a formal exercise.

 

[NatLion]

Agree. Further, see no value in itemizing the total cost of employment to people already on the payroll. For budget purposes, we calculate benefits as a percentage of base. Everyone in the firm knows what that is, No reason to slug the staff over the head with it as a formal exercise.

One would think that was the case, but nonetheless lots of firms do it. The cynic might think that they do it to remind you that you make more than you think, so don't bother asking for a raise.

 

[Art]

One would think that was the case, but nonetheless lots of firms do it. The cynic might think that they do it to remind you that you make more than you think, so don't bother asking for a raise.

I don't doubt it. Fortunately I don't work at such a place.